Hunton Insurance Recovery Blog

The members of Hunton’s Insurance Recovery group present regularly on today’s hot topic insurance coverage issues. Upcoming insurance presentations for November 2019 include:

• Walter J. Andrews will be presenting on Experts and Their Role in Bad Faith Litigation at the 2019 Insurance Law Symposium at Nova Southeastern University in Davie, Florida on November 1, 2019.
• John C. Eichman will be presenting on Pursuing the Insured’s Claim at the ABA’s 2019 Fidelity & Surety Law Fall Conference in Boston, Massachusetts on November 7, 2019.
• Syed S. Ahmad will be presenting with ...

The Fall 2019 Edition of The ALI Reporter recognizes Hunton partner Lorelie S. Masters for her significant contributions to the new Restatement of the Law, Liability Insurance (RLLI). The RLLI was approved by the American Law Institute (ALI) at its 2018 Annual Meeting and published in late September 2019. In 2010, Lorie was one of 40 attorneys invited to serve as an Adviser to the Restatement, and she was heavily involved throughout the life of the eight-year project.

On October 16, 2019, Hunton Andrews Kurth insurance lawyers Michael S. Levine and Daniel Hentschel discussed insurance coverage issues concerning blockchain technology and cryptocurrencies in an article published by IRMI (Insurance Risk Management Institute, Inc.). The full article is available here. In the article, the authors discuss the potential risks associated with the use of the revolutionary technology and the potential coverage gaps that may arise in certain insurance policies.

After a four-day trial, an Arizona federal jury found that Western Truck Insurance Services, Inc., an insurance broker, was negligent in selling Madison Alley Transportation and Logistics Inc. a business interruption policy with inadequate annual limits. Based on its finding of negligence, the jury determined that the broker was liable for $685,000 of $1,000,000 in damages suffered by Madison Alley as a result of a flood in its warehouse.  The verdict and Complaint, filed in Arizona state court before the case was removed, can be found here and here.

Recent headlines underscore the security challenges faced by public-facing businesses. From physical threats to cyber attacks targeting a wide range of critical infrastructure, companies in diverse sectors, such as the financial, retail, entertainment, energy, transportation, real estate, communications and other areas, face a challenging landscape of risks and potential liabilities. Join us on October 28, 2019, at 12:00 p.m. EST, for a webinar to discuss these issues, including why companies should consider SAFETY Act protection and how to obtain it.

Hunton Insurance Coverage practice partner Michael Levine will be speaking in an upcoming Strafford live webinar, "Depreciation of Labor in Property Insurance Claims: Guidance From Recent Cases," scheduled for Wednesday, October 30, 1:00pm-2:30pm EDT.

In Dunn, et al. v. Columbia National Insurance Company, No. 2:17-cv-0246 (N.D. Ga.), an insurance company refused to defend an insured in a personal injury claim contending that the insured failed to cooperate in the defense. The underlying claim stemmed from an automobile accident, where an employee of Lawson Air Conditioning and Plumbing, Inc. (“Lawson”), Ronald Patterson, struck members of the Dunn family with a pickup truck owned by Lawson as the family was walking out of a Walmart store. The Dunn family members suffered bodily injury as a proximate result of the accident.  Patterson admitted fault.

A federal court in Illinois ruled recently, in Cincinnati Insurance Company v. H.D. Smith Wholesale Drug Company, that Cincinnati Insurance Company was required to indemnify H.D. Smith for a $3.5 million settlement it reached with the State of West Virginia.  The settlement resolved an action in which West Virginia alleged that H.D. Smith contributed to the state’s opioid addiction epidemic through its negligent distribution of opioid prescription drugs.

In a recent Global Data Review article, Hunton Andrews Kurth insurance practice head Walter Andrews commented on the FBI’s guidelines on ransomware payments and the insurance industry’s aggressive marketing of ransomware policies, noting that policyholders now have a resource that can help cover the cost of such an attack. The full Global Data Review article can be found here.

Recap of Hunton Insurance Recovery Group presentations in August and September 2019 focusing on key risk management techniques and strategies for maximizing recoveries under corporate insurance policies and enforcing indemnity rights under technology, sales, services, outsourcing, and other commercial contracts:

• John Eichman and Sergio F. Oehninger presented a seminar on Electronic Crime – Insurance Coverage for Cyber Attacks and Computer Fraud, Independent Community Bankers of America Webinar Series, September 24, 2019.
• Sergio F. Oehninger presented seminars on ...

Insurance companies frequently raise the so-called “dishonesty” exclusion that is typically found in most professional liability and directors and officers insurance policies.  Last week, the U.S. Court of Appeals for the Sixth Circuit took a substantial step toward curtailing that practice.  In a coverage dispute with eight-figure implications, the appellate court found in favor of the policyholder and ruled that publishing false statements does not equate to dishonesty and thus is not sufficient to support application of a dishonesty exclusion.

The Seventh Circuit held last week that a manufacturer’s insurer must cover its insured, a designer and builder of anaerobic digesters, under its errors and omissions policy for claims alleging breach of contract, despite an exclusion in the policy for claims arising out of the breach of an express or oral contract. The decision in Crum & Forster Specialty Insurance Company v. DVO, Inc., No. 18-2571 (7th Cir. Sept. 23, 2019), illustrates the practical application of policy construction to avoid what would otherwise amount to an illusory promise of coverage.